A little Econ 101 vis a vis Iraq

FYI, I didn't have time to respond to this part earlier.

But the scheme that Charles Ponzi invented was a pyramid in which current investors were paid high returns from current money brought in by new investors. It is unsustainable and always eventually fails, because as the pyramid grows bigger, it is impossible to bring in enough new investors to cover the promises made to previous investors. Each level of the pyramid requires more new investors to meet more people demanding their return on their "investment." I use the term investment loosely, though, because there is no REAL investment in a Ponzi scheme. It is just taking money from one person, then taking money from someone else, and paying the first person his "return" with a portion of the new money, while someone else skims off the top.

Social security *is* a Ponzi scheme -- the only legal one, by the way, because just like what Ponzi did in the 1800s, Social Security does not make any real investments. It takes money from later "investors" (i.e. taxpapers) to pay benefits to earlier investors (retirees). The reason social security doesn't work is the same reason EVERY Ponzi scheme fails. It can't recruit new taxpapers fast enough to continue meeting its obligations to previous investors (the retirees). We are at a critical point, because not all generations had similar birth rates (the baby boomers retiring now are a particularly large cohort) and life expectancy has increased. So it is compounded by the fact that we have fewer young workers relative to the number of retirees.

This is not rhetoric and it is not "opinion." And it is not for people who "don't know better." It is a simple reality that a 14-year old not being condescended to can understand. Social security -- like all similar schemes -- will eventually collapse (absent reducing benefits, or in other words, not living up to the promises they made when people paid in... or them increasing taxes to meet the obligations they have promised people, which means that the current generation will be paying a ton more than previous generations without the promise of the generous benefit). It is not only flawed. It was a bad idea from the get go.